U.S. Supreme Court to revisit campaign finance limits

* Republican National Committee involved in challenge (Adds comments by petitioner and details on his case)

By Jonathan Stempel and Lawrence Hurley

WASHINGTON, Feb 19 (Reuters) - Three years after easing limits on corporate political donations in the Citizens United decision, the U.S. Supreme Court agreed on Tuesday to consider whether to lift caps on how much individuals may contribute to candidates.

In a brief order, the court agreed to hear McCutcheon v. Federal Election Commission, a challenge by Alabama businessman Shaun McCutcheon and the Republican National Committee to limits on aggregate donations over a two-year period.

A three-judge panel of the U.S. District Court in Washington, D.C., in September had rejected McCutcheon's argument that capping donations violated the First Amendment of the U.S. Constitution.

But if the Supreme Court disagrees, it could use the case to change part of its landmark 1976 decision, Buckley v. Valeo, that upheld such caps, which are sums in the mid-five figures.

"It's not a watershed case in the sense Citizens United was, but it could extend that case's logic to contribution limits, which could be very significant," Richard Hasen, a campaign finance expert and law professor at the University of California at Irvine, said in a phone interview.

The Citizens United case was decided in 2010 by a 5-4 vote, and removed limits on independent expenditures made by companies and unions to support or oppose political candidates. The court based its ruling on a First Amendment right to free speech.

Critics of the position taken by the RNC and McCutcheon believe that lifting contribution limits could allow individual donors undue influence.

"If the Supreme Court reverses its past ruling in Buckley, the Court would do extraordinary damage to the nation's ability to prevent the corruption of federal officeholders and government decisions," Fred Wertheimer, president of Democracy 21, said in a statement. The group plans to submit a brief urging the court to uphold the limits, he said.

The Democratic National Committee declined to comment.

PETITIONER BACKED REPUBLICANS

McCutcheon is chief executive of Coalmont Electrical Development Co, a general contractor in McCalla, Alabama, located about 20 miles (32 km) southwest of Birmingham.

He contributed ${esc.dollar}33,088 to 16 candidates in the 2012 election cycle. Many donations were in increments of ${esc.dollar}1,776, referring to the year the Declaration of Independence was signed.

McCutcheon had wanted to contribute another ${esc.dollar}21,312 to 12 more candidates and make donations to the RNC and to committees supporting Republican candidates. But those contributions would have caused McCutcheon to run afoul of a ${esc.dollar}46,200 limit on contributions to candidate committees.

Another limit capped overall contributions to national political parties, state political parties and non-party political committees at ${esc.dollar}70,800, so long as no more than ${esc.dollar}46,200 goes to the latter two groups.

"I am very glad and excited that our case and other cases are moving forward as expected," McCutcheon said in an email.

DISTORTION ALLEGED

Lifting the limits could allow individuals to funnel more money overall to candidates. For example, an individual could choose to donate ${esc.dollar}1 million to 400 candidates in ${esc.dollar}2,500 increments, but not donate ${esc.dollar}1 million to a single candidate.

"The limits distort the system by forcing people to give money to Super PACs and advocacy groups, when they would rather give money to individual candidates and parties," James Bopp, a lawyer for McCutcheon and the RNC, said in a phone interview.

"That drives money away from the most accountable and transparent actors in our political system, in favor of entities that are basically unaccountable to the voter," he added.

Super PACs are a type of political action committee spawned in part by the Citizens United decision.

More than a dozen of these groups spent nearly half a billion dollars to support Republican presidential candidate Mitt Romney.

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